What are people saying about Rental Results?

Retro-Spective

Last September I returned to my childhood home in Australia and subjected my partner to a tour of 'formative places' for me. When I'm famous, it will be the Gracelands tour, I'm sure. The highlight, for me anyway, was revisiting the house I spent my first years in. My home town has since been through a boom and it is now 'the place' to live. Holiday makers always flocked there, so summer rentals have always been a steady industry. When we sold our home, it was bought by an out-of-town investor – smart person, as houses of that size and location now rent for over $1,000 per week during peak times.

Where they proved not so smart was by neglecting upgrades, and I hate to say, basic maintenance. I was surprised to see the house painted the same yellow I inexpertly helped my parents apply. A hint for you, don't let your 4 year-old decorate! I can honestly say I have been renovating a long time. However, together we must have done a fairly good job as more than 25 years after we left, the paint was sound. Mostly, anyway.

A closer look at the property revealed it was vacant and had been abandoned a few months, judging by a wall calendar. Hmmm, strong growth area, and there is an empty house. How could that be? Peering through the windows revealed the inside received the same attention as the outside – none. There was the same vomit inspired shag-pile carpet, knotty-pine wood panelling, loud wall-paper. Oh but the kitchen! How happy my mum was when the kitchen was completed. How it was the envy of her friends. How they remarked about the brown tile splash-back and the orange bench. It is still remarkable. We remarked it would make us homicidal, which could explain some stuff about my upbringing.

Remember, this area fetches rents over $1,000 per week for 'average quality' houses. The land it sits on is worth over $1.5m, and yet this house would not even attract drug dealers. "Oh, but that is in Australia, right? We don't neglect rentals here". Yeah right.

Wellington is a world from my home town, but as a property manager I see inside many different properties, and while not created equal, they aren't maintained equally either. A recent case is a landlord with a number of investments, all 'tired', and he thinks this is what the rental market expects, right? No, people want well-presented properties. It always takes about 3 weeks of vacancy to fill a property, doesn't it? Nope, many go like hotcakes. But it is the location, right? Nah, the right house for the right price will go quickly. And I am not saying 'right price' = cheap, because the right price is an appropriate price for what you are offering.

We decided one of his properties needed renovation before we were to show anyone through. The orange and umber stripe curtains, although indestructible, were repulsive, and the wall paper, last applied during my childhood, was closing in like a bad LSD trip. Now I know some readers will think, "well, so long as it is sound, leave it as is". Err, no, but thank you for having properties that make mine look even better by comparison. We set a meagre but sufficient renovation budget, and spent it as follows: Paint: $200 Labour: $300 Curtains: $200. Plus, re-carpet one room, which the outgoing tenants paid as they had damaged it.

This budget of $700 was about 3 weeks rent. The perfect opportunity to do the work came when the outgoing tenants paid rent in lieu of notice. Painting the worst bedrooms and changing the curtains made a world of difference. The new tenant loved it, and paid $60 per week more than it previously achieved. If you do the sums, you will see that spending $700 returned over $3,000 gross in just the first year. Plus, there was not a single day of vacancy. If you think we cheated by using the 3 weeks in lieu as time to show the property, you're wrong – the new tenancy arranged from overseas on the first day of advertising and first time they physically saw it was when they walked in with their cash and suitcases). They signed up long-term too, which reduces the risk of future income loss during tenant changeover.

Even if the rent had only increased by $20, the renovation would pay for itself in just 9 months. Increased desirability of the property usually means vacancy time decreases – if it typically was vacant for 3 weeks, and this dropped to 2 weeks, the renovation would pay for itself in 6 months. If the previous typical duration of tenancy was 8 months, and it has increased to 1 year, this improves return due to less vacancy, lower advertising costs, and your time. Also remember that gains in rent accumulate – the next year you may not have to improve anything, but you still get that higher rent, and most improvements are good for 5-10 years sometimes, but rarely, more.

So now you know how to maximise your rental income with a minuscule expenditure. Take it to heart. Of course, you could always try renting your retro-time-warp property to Austin Powers for 1960's prices – Yeah Baby!

Our Philosophy

We are honest and act with integrity. We think it is necessary to love what one does, leave things better than they were found and take time to enjoy the world while we walk it. We bring quality to others in our dealings and treat people with respect. We think it is essential to have fun, so humour is always welcome at Rental Results.

Awards & Associations

We are a member of the Independent Property Managers' Association (IPMA), and Leading Property Managers of New Zealand (LPMNZ).

We are also members of the Wellington Property Investors Association and Jackie Thomas-Teague is the former president.